The Next Gambling Dispute?

As was widely reported yesterday, the EU is launching an internal investigation on U.S. online gambling laws, to decide whether to bring a WTO complaint:

The European Union threatened to lodge a complaint at the World Trade Organization over U.S. laws that bar gambling Web sites, saying they may break global rules by discriminating against companies based in the bloc.

U.S. authorities have targeted European companies for operating gaming sites, said the European Commission, which today announced an investigation into the U.S. practice. The U.S. hasn't taken action against domestic companies that offer similar services, said the commission, the EU's executive arm.

But wait, didn't the EU already agree on compensation in this case related to the U.S. withdrawal of concessions? Once a settlement is reached with Antigua and Costa Rica, the countries who haven't yet settled, isn't the case over? Maybe not, as the EU is concerned with prosecution for past gambling activities that occurred prior to withdrawal of the concessions. From an EU "fact sheet" for the case:

Foreign companies are prevented from offering Internet gambling services in the US. The US authorities are investigating EU companies for services that they have offered in the past in the US. EU companies that had been active in the US have left the market, but this has not stopped the US Department of Justice (DOJ) from continuing to act against EU companies. In addition, EU companies argue that the DOJ has not been targeting US companies that were offering equivalent services.

The Remote Gambling Association (RGA) argues that the legal situation in the US as regards Internet gambling was unclear in the past. Despite statements by the DOJ that Internet gambling was not allowed, many local companies were actively supplying this type of service. In addition, the US had in the Uruguay Round undertaken legally binding GATS commitments to allow non-discriminatory access to its gambling market.

...

The Federal laws targeted by this complaint had already been condemned in a WTO dispute settlement case (WT/DS 285) brought by Antigua and Barbuda against the United States. However, the US did not comply with the relevant rulings, but announced instead its intention to withdraw for the future its GATS commitments on gambling and betting services in accordance with the procedures provided for in Article XXI of the GATS. The US is still negotiating compensatory adjustments in other sectors with affected WTO Members in exchange of this withdrawal. The EU and the US reached a deal on the compensation due to the EU on 17 December 2007.

The RGA argues that applicable US obligations would not disappear even after the completion of the current process of withdrawal of the United States' GATS gambling commitments. The reason for this is that the withdrawal would not have retroactive effects, that is, would only remove US obligations for the future, but not in respect of past events. In this particular case, the DOJ is only targeting past events (the Internet gambling offered by EU companies in the past) when US GATS commitments were in place. (emphasis added)

In related news on the gambling dispute, blogger Ed Brayton continues his quest to find out what's in the U.S. gambling settlements, with the EU and others.

Comments

The Next Gambling Dispute?

As was widely reported yesterday, the EU is launching an internal investigation on U.S. online gambling laws, to decide whether to bring a WTO complaint:

The European Union threatened to lodge a complaint at the World Trade Organization over U.S. laws that bar gambling Web sites, saying they may break global rules by discriminating against companies based in the bloc.

U.S. authorities have targeted European companies for operating gaming sites, said the European Commission, which today announced an investigation into the U.S. practice. The U.S. hasn't taken action against domestic companies that offer similar services, said the commission, the EU's executive arm.

But wait, didn't the EU already agree on compensation in this case related to the U.S. withdrawal of concessions? Once a settlement is reached with Antigua and Costa Rica, the countries who haven't yet settled, isn't the case over? Maybe not, as the EU is concerned with prosecution for past gambling activities that occurred prior to withdrawal of the concessions. From an EU "fact sheet" for the case:

Foreign companies are prevented from offering Internet gambling services in the US. The US authorities are investigating EU companies for services that they have offered in the past in the US. EU companies that had been active in the US have left the market, but this has not stopped the US Department of Justice (DOJ) from continuing to act against EU companies. In addition, EU companies argue that the DOJ has not been targeting US companies that were offering equivalent services.

The Remote Gambling Association (RGA) argues that the legal situation in the US as regards Internet gambling was unclear in the past. Despite statements by the DOJ that Internet gambling was not allowed, many local companies were actively supplying this type of service. In addition, the US had in the Uruguay Round undertaken legally binding GATS commitments to allow non-discriminatory access to its gambling market.

...

The Federal laws targeted by this complaint had already been condemned in a WTO dispute settlement case (WT/DS 285) brought by Antigua and Barbuda against the United States. However, the US did not comply with the relevant rulings, but announced instead its intention to withdraw for the future its GATS commitments on gambling and betting services in accordance with the procedures provided for in Article XXI of the GATS. The US is still negotiating compensatory adjustments in other sectors with affected WTO Members in exchange of this withdrawal. The EU and the US reached a deal on the compensation due to the EU on 17 December 2007.

The RGA argues that applicable US obligations would not disappear even after the completion of the current process of withdrawal of the United States' GATS gambling commitments. The reason for this is that the withdrawal would not have retroactive effects, that is, would only remove US obligations for the future, but not in respect of past events. In this particular case, the DOJ is only targeting past events (the Internet gambling offered by EU companies in the past) when US GATS commitments were in place. (emphasis added)

In related news on the gambling dispute, blogger Ed Brayton continues his quest to find out what's in the U.S. gambling settlements, with the EU and others.